New Private Investment Law

• Published date: 20 July 2023
• Subject Matter: Government, Public Sector, International Law, Litigation, Mediation & Arbitration, Inward/ Foreign Investment, International Trade & Investment, Arbitration & Dispute Resolution
• Law Firm: PLMJ
• Author: In's Pinto Da Costa and Marta Pedro

Law 08/2023 of 9 June

Law 8/2023 of 9 June (the "Investment Law") has been published in the Official Gazette. This new law establishes the rules applicable to private investments eligible for certain tax and non-tax guarantees and incentives. It also repeals the 30-year-old rules established by Law 3/93 of 24 June. The Investment Law will enter into force on 8 September 2023, i.e., 90 days after its publication.

We will now highlight some of the features of this new law:

Scope of application: The new Investment Law continues to apply to both domestic and foreign investments, as the previous law did. However, its scope has been extended to potentially cover public-private partnerships, large-scale projects and business concessions. It may also cover investments in the areas of prospecting, research and production of oil, gas and mineral extraction, and public investments financed by State Budget funds in matters not regulated by specific legislation. This included the processing, trading and transport of mining and/or petroleum products, when carried out by entities dedicated exclusively to the undertaking of those activities.

Forms of investment: The Investment Law includes the classification of investments according to their origin (domestic, foreign or mixed) and their type (direct or indirect). Among other things, the forms of direct domestic investment have been expanded and they now include the general transfer of the Right of Use of Land (DUAT). This is in contrast to the previous law, which provided that this could only be done in specific cases and after proper validation by the competent authorities. The forms of investment will now also include the incorporation of technology and knowledge that can be valued in monetary terms, and the use of capital in Mozambique in the context of reinvestment, among other things.

The Investment Law also expands the possibilities for foreign direct investment. These include the incorporation of technology and knowledge that can be valued in monetary terms, the provision of specialised services from abroad for the benefit of economic projects, and the conversion of the value of Mozambican foreign debt relating to loans and financing registered with the competent authority.

In terms of the origin of the funds, the new Investment Law also provides for a new form called mixed investment, which allows the pooling of direct and/or indirect, domestic and/or foreign investments.

Investors' guarantees: The Investment...